MINUTES OF THE SENATE COMMITTEE ON TRANSPORTATION Sixty-eighth Session May 9, 1995 The Senate Committee on Transportation was called to order by Chairman William R. O'Donnell, at 1:44 p.m., on Tuesday, May 9, 1995, in Room 119 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator William R. O'Donnell, Chairman Senator Maurice Washington, Vice Chairman Senator Lawrence E. Jacobsen Senator Jon C. Porter Senator Joseph M. Neal, Jr. Senator Raymond C. Shaffer Senator O. C. Lee STAFF MEMBERS PRESENT: Don O. Williams, Chief Principal Research Analyst Diane Rea, Committee Secretary Debbra King, Program Analyst, Legislative Counsel Bureau (LCB) OTHERS PRESENT: Ray Sparks, Acting Deputy Director, Department of Motor Vehicles and Public Safety (DMV&PS) Mitchell Spears, Detective, Investigative Services Division, Las Vegas Metropolitan Police Department (METRO) Warren Donaldson, Special Agent, Western Region, National Insurance Crime Bureau (NICB) Larry Stout, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS) Jack Jeffery, Southern California and Nevada Highspeed Train Commission Doug Dickerson, Lobbyist, City of Las Vegas Jim Weller, Director, Department of Motor Vehicles and Public Safety (DMV&PS) Mark Krmpotic, Management Analyst, Department of Motor Vehicles and Public Safety (DMV&PS) Donna Wadey-Howell, Acting Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS) Senator O'Donnell asked Senator Neal to report on the conference report on Senate Bill (S.B.) 65. SENATE BILL 65: Revises provisions governing examination of applicant for driver's license. (BDR 43-585) Senator Neal reported that the report has been signed by all parties and the decision is to accept the Assembly amendment. Senator O'Donnell opened the hearing on S.B. 377. SENATE BILL 377: Revises provisions relating to licensing and registration of certain vehicles. (BDR 43- 567) Ray Sparks, Acting Deputy Director, Department of Motor Vehicles and Public Safety (DMV&PS), testified the department has requested this bill to address three issues involving motor carriers. Section 1 proposes personalized license plates cannot be issued for vehicles registered under an apportion registration because that is not consistent with the policy of the International Registration Plan (IRP). Section 2 extends the provision for the application of credit when a registration is transferred from a vehicle to another vehicle and to a trailer. Section 3 states if the owner of a vehicle over 26,000 pounds surrenders his license plates and registration certificates, DMV&PS is allowed to refund the remaining registration fees. If the registration certificate or license plate(s) has been lost or stolen, affidavits may be substituted for the certificate or plate(s). Senator O'Donnell asked if someone has time left on an out-of- state registration, and wants to register the vehicle in Nevada, is DMV&PS also asking for legislation to allow for a credit for the time left on the out-of-state plates? Mr. Sparks stated that issue has come up in two contexts in this Sixty-eighth Session. In DMV&PS's research, they have found that none of the surrounding western states have a provision to allow for this type of credit. If everyone came into DMV&PS and registered their vehicles within the 45 days allowed, the state will not lose that revenue. The cost factor of registration in Nevada is a disincentive. Senator O'Donnell asked if he has a vehicle that he is taking to the scrap yard, can he pull the license plate off the scrapped vehicle and apply the credit left on the plates to a new utility trailer registration? Mr. Sparks stated that is what the bill is for. Senator O'Donnell closed the hearing on S.B. 377. Senator O'Donnell opened the hearing on S.B. 378. SENATE BILL 378: Prohibiting defacement, destruction or alteration of identification number of part of motor vehicle. Senator O'Donnell stated this bill came from the Las Vegas Metropolitan Police Department (METRO). Michael Spears, Detective, Investigative Services Division, Las Vegas Metropolitan Police Department (METRO), testified in the year-and-half he has been in the auto theft division, he has seen the auto theft in Nevada rise 11 percent. Clark County alone has 1,000 vehicles stolen each month. The purpose of the bill is to give the police another tool for identification of stolen vehicles. Section 1 allows any police officer to take possession of a vehicle that is being operated without proper registration, or a defaced VIN (vehicle identification number) or any other identification number. Section 2 will make it against the law to operate a vehicle on the highway with an altered VIN. Section 3 will make it against the law to deface or destroy a VIN. Senator O'Donnell asked what if a vehicle has two VIN's? Mr. Spears asked if he is referring to a door being replaced with a different federal sticker? He said that vehicle will be held and inspected to assure it is not stolen. The owner of the vehicle will be notified as to what needs to be done to correct the problem. If it is not a stolen vehicle, it will not be held any longer than is necessary. Warren Donaldson, Special Agent, Western Region, National Insurance Crime Bureau (NICB), testified if the VIN is still intact, there is not a problem. The removed number is where a problem occurs. Senator Shaffer asked if there is a time limit the department has to get the vehicle back to the owner, if it is not stolen? Mr. Donaldson replied the vehicle is impounded through a tow company. Usually within 1 to 2 days, the vehicle is inspected. Once it is found to be not stolen, it is released back to the owner. Larry Stout, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS), testified the registration division supports this bill. Senator O'Donnell closed the hearing on S.B. 378. Senator O'Donnell opened the hearing on Assembly Joint Resolution (A.J.R.) 25. ASSEMBLY JOINT RESOLUTION 25: Urges President and Congress to support efforts to build and use super-speed trains which operate by magnetic levitation. (BDR R-419) Jack Jeffery, Southern California and Nevada Highspeed Train Commission, testified the commission has been working on the area between Las Vegas and Anaheim, California. The reunification of Germany has caused a delay in the work on the train and the financing. The freeway right-of-way is now available. The train rides on a 3/8 inch magnetic cushion at about 180 miles-per-hour. The grant from the Federal Railroad Administration (FRA) is not all spent. The commission is trying to get that money transferred to the commission so they can do a ridership study to try to generate the interest in the project again. The FRA stated they want to see an expression of support from the states before they will allow that. He said that is really what the resolution is about; the support of the state. Mr. Jeffery said there is a study for a line from San Diego to the San Francisco area. That study is being done through Cal- Trans. The Anaheim to Los Angeles route, they feel will be the most economical. The commission is trying to keep the level of interest high so that these projects will not be shelved. Doug Dickerson, Lobbyist, City of Las Vegas, testified is presented to the committee (Exhibit C). It had been presented to the Assembly when they heard the resolution. Don O. Williams, Chief Principal Research Analyst, stated that brief statements given to the committee (Exhibits D and E) to summarize the resolution. Senator O'Donnell closed the hearing on A.J.R. 25. Senator O'Donnell asked Mr. Sparks, Mr. Weller and Mr. Krmpotic from DMV&PS to come forward and review the DMV&PS's 5-point plan for the committee. Jim Weller, Director, Department of Motor Vehicles and Public Safety (DMV&PS), testified the plan addresses the problem of service in Las Vegas and problems in the titling section in Carson City. The 5 points are: one to give the motor vehicles side the opportunity to reorganize based on the Business Process Reengineering (BPR) plan. The second point is the facilities, Capital Improvement Program (CIP) issues which involves a new office in Henderson, remodeling of the East Sahara and Carson City facilities. Third is Infrastructure which includes the BPR proposal and legislative initiatives. Fourth is staff training and development to cross-train the employees. Fifth is the level II staffing with 12-hour days Monday through Friday, and 8 hours on Saturday with an average of 80 percent of the windows open during those times. He said in addition to that is the use of credit cards to renew registration and an imaging system improvement. Mr. Weller stated that the committee is aware of the 22 percent cap that is on certain budgets. To put this plan into effect, DMV&PS is looking at 25 percent, if that is the way the committee wants to finance the 5-point plan. Mark Krmpotic, Management Analyst, Department of Motor Vehicles and Public Safety (DMV&PS), testified with a full implementation of the plan beginning in 1996 the cost stands at $3.6 million the first year and $4.8 million the second year. That includes all the points of the plan, but does not include the BPR cost. Senator O'Donnell asked Debbra King for her analysis of what is needed by the DMV&PS to facilitate the 5-point plan? Debbra King, Program Analyst, Legislative Counsel Bureau (LCB), testified that in her discussion with DMV&PS, they talked about a 3-phase implementation of the staffing portion. That will allow the agency to start hiring staff for the West Flamingo office in October of 20 people. After the 2-month training period, they will hire 20 more people in December 1995. Starting in February 1996, the staffing will be available to operate 12-hour shifts in the West Flamingo office, 5-days-a- week and 8 hours on Saturday. After a 3-month period they will report back to the Interim Finance Committee (IFC) in June and let them know if the plan is working. She said if the plan is working, IFC will authorize filling additional positions for the Carey and West Sahara offices. Carey will start staffing July 1 and West Sahara will start staffing in September, if the remodeling is completed. She said her calculations are $808,000 in FY (fiscal year) 1996 and $2.3 million in FY 1997. Those figures do not include the discount rate on credit cards which is an additional estimated annual cost of $945,000. This does not include funding the lease for the document imaging system, in the amount of $84,000 a year. It does not include equipment upgrades to allow the agency to migrate off the Department of Information Systems. That will be an additional $687,000 in FY 1997 and $470,000 in FY 1998. Senator O'Donnell asked if the imaging system will allow DMV&PS to do titling all over the state? Mr. Sparks replied that the system will not allow that. It makes the existing process more efficient to store all the backup documents for registration and title transactions. The system will make the information available to the field offices in a more expedient manner. Additional computer hardware will be needed to decentralize the issuance of titles. Mr. Weller said DMV&PS is hoping that the BPR will give them direction on furthering the imaging system for decentralization. Senator O'Donnell asked if DMV&PS could wait until after the BPR to get the imaging system or is it needed right now? Mr. Weller replied that it will be needed anyway. DMV&PS can get started into the system and let the BPR suggest which direction they should go with it. DMV&PS has talked with two consulting firms and they have suggested that the 5-point plan is the way for the department to go. Mr. Sparks said that assuming the BPR is funded, that will be completed within the first year of the biennium. If DMV&PS is not able to follow through with implementing some of the suggestions from the study, they will be on hold until the Sixty-ninth Session when they will have to request additional funding from the Legislature. The imaging system can be implemented without the computer updates. He said additional enhancements will be needed when the computer upgrade is done. Senator O'Donnell said that the LCB staff says that the computer upgrade is needed in order to do the document imaging. Mr. Weller said that DMV&PS's data processing individual who put the program together should come over and talk with Ms. King. Senator O'Donnell stated that the committee's intent is to speed up the lines and make the department more efficient. He said he is not in favor of upping the 22 percent cap, taking money from the Highway Fund, in order to accomplish the improvements. He said he: Proposes to fund this plan to take $2.5 million from, or a portion of the privilege tax, which is now generated on every vehicle that is registered in the State of Nevada. That portion, or that $2.5 million annually, will be directly assigned to the DMV&PS. There will now be a hole of $2.5 million in the Highway Fund which will have to be filled. There is a 6 percent tax that is now placed upon short-term lessors of automobiles. The way that breaks out is 2 percent goes to the General Fund, 4 percent is a rebate back to short-term lessors. There is a bill in the Assembly that allows 2 percent to go to the Highway Fund. At this point, I am not sure that is viable. If it is not viable, an adjustment to that 6 percent may be necessary. When the Assembly bill comes over, we will take a look at what that bill does and whether it is viable to take 2 percent that is now going into the General Fund and put that back into the Highway Fund; thereby replenishing the $2.5 million that we are going to take from the Highway Fund for the funding of the DMV&PS's 5-point plan. Mr. Sparks stated that he believes that bill is Assembly Bill (A.B.) 419. The Assembly is discussing an amendment to make the effective date July 1997, based on the argument that the current General Fund budgets are built assuming that $5 million will go into the General Fund. ASSEMBLY BILL 419: Revises provisions governing disposition of money collected from fee imposed on short- term leases of passenger cars. (BDR 43-371) Senator O'Donnell asked for comments from the committee on his idea. Senator Shaffer asked if the capital improvement plan for Henderson is going to be funded in some other way? Senator O'Donnell replied that he believes that is in the CIP. Mr. Sparks stated that does not count toward the 22 percent calculation. Senator Neal asked what fee is going to be used? Senator O'Donnell stated that the short-term lessors have a tax. Of the 6 percent car rental tax, 2 percent goes to the General Fund, 4 percent is a rebate back to the car rental agency to offset the cost of registering the vehicle. Senator Neal said the tax was put on the car rentals to allow for some special projects to be funded. He asked if this can be considered a special project? Mr. Sparks said that the states one-third of the car rental fee is approximately $5 million a year. There is approximately $10 million being withheld by the rent-a-car companies as an offset of the fees they pay for the registration and titling of their fleet vehicles. Senator Neal said that the bill to allow for this tax was passed to cover special projects. He asked how many million DMV&PS needs to get the 5-point plan? Mr. Sparks replied about $3.5 million the first year and about $4.8 million the second year, if the full plan is funded. The continuing cost will depend on whether the computer system is purchased or leased. Mr. Krmpotic stated that DMV&PS presently owns the computer system and pay maintenance costs on it. If DMV&PS stays with the same company they might get a rebate on the equipment they have now. Senator O'Donnell stated that the budgets are closing tomorrow and he would like to get some direction from the committee. SENATOR NEAL MOVED TO TAKE THE PROPOSAL OF THE 5-POINT PLAN TO THE BUDGET COMMITTEE TOMORROW. SENATOR SHAFFER SECONDED THE MOTION. Senator Lee asked how the chairman's proposal differs from the DMV&PS's proposal? Mr. Weller replied that the two differences are the phasing in of the implementation and the computer enhancements. Senator Lee asked if the proposal will be on-line in 2 years and the chairman's proposal might take 4 years? Mr. Weller replied the DMV&PS is looking at the staffing issue for the first 2 years and maybe the document imaging system. Senator Lee stated that the committee needs to do something to correct the problem with the DMV&PS and the public. Senator O'Donnell stated that the problem he has is how to replace the money being taken from the Highway Fund. If that is not replenished, the Highway Fund is being robbed as well as the DMV&PS's 22 percent of what the Highway Fund gets. Senator Lee asked if the committee could amend the proposal to implement the plan now rather than in 1997? Senator O'Donnell replied that the 2 percent is going into the Highway Fund. That creates a $5 million hole in the General Fund. Where is that money going to come from? Senator O'Donnell asked if the committee will allow him to work with DMV&PS to come up with a compromise to do as much as possible and to save as much money as possible? Mr. Weller stated that DMV&PS's frontline people are taking a lot of verbal abuse from the public. Senator O'Donnell said if the committee will back him up, he will take this matter to the finance committee and get it taken care of. Senator Washington stated that the chairman has his support. Senator Jacobsen asked if progress reports will be acceptable? That will keep the committee aware of the progress so they know what is happening and if there are any loose ends that need to be taken care of. Senator O'Donnell said the BPR is an extensive document that is going to have to be done. Certain events have to be held off until the BPR is done, and the BPR tells DMV&PS that there are certain things that must be done before another phase of the plan begins. He wants to be sure there is enough money to take care of the problems to begin with and then go into the additional things that the BPR directs. Mr. Weller stated that the plan, as originally presented, will get the DMV&PS on the way to resolving a lot of their problems. The BPR will provide the long-range plan. What DMV&PS is asking for in the biennium is believed to be consistent with what the BPR is going to tell them. Senator O'Donnell asked if there is any place there can be some savings in the plan? Mr. Weller asked about just implementing the people at this point and wait on the computers? Senator O'Donnell said he would like to staircase the computer in. Mr. Weller stated that the DMV&PS can improve service with more people, but will provide better service yet with the new computers. Senator Porter asked if DMV&PS will use an outside vender to handle the credit card renewals or will they be done internally? Mr. Sparks replied that is an option. If DMV&PS goes to a telephone vehicle registration renewal system, they are looking at the option of having a vendor do that and they will charge a fee for that service. Some of the money in the proposal is for over-the-counter renewal service. Mr. Weller said the university system uses the credit card system and they budget for the surcharge fee. Mr. Sparks said there is some discussion about federal legislation that will preclude the credit card companies from prohibiting governments from charging a surcharge for that service. The credit card companies are adamant about not authorizing any merchant to surcharge for the use of a credit card. Senator O'Donnell said if the DMV&PS cannot address the credit card money unless they can locate a third-party vendor who can get around the ruling, he wants to wait on that part of the plan. Ms. King stated that by taking out the $900,000, the first year will be reduced to $2.7 million and in year 2 to $3.9 million. She asked if this includes phased in staffing or is this hiring everybody on July 1? Mr. Sparks replied that the phasing in of the personal will be reasonable. Mr. Krmpotic stated that there will be a substantial reduction in cost the first year because some of the staff will come on in October and more in December, with the next phase coming on during the second year of the biennium. Ms. King asked if DMV&PS is planning to hire every 20 days or every 3 months? That will make a difference. Mr. Krmpotic said they are talking about the phased in increase in staffing. Senator Lee asked if there is a continuing cost of the proposal? He is envisioning taking money from the Highway Fund and then the rental fee is going to take care of the hole created in the Highway Fund. Senator O'Donnell responded that if all the 2 percent tax is put into the Highway Fund, it creates approximately $5 million a year. The $10 million hole is created in the General Fund which Senate Committee on Finance has to deal with. Senator Lee asked how the hole will be funded after the biennium? How do all these additional people get paid? Senator O'Donnell stated that the hole does not get any bigger. The people get paid out of the Highway Fund. Mr. Sparks stated that Mrs. Wadey-Howell just informed him that the Assembly committee did a Do Pass on Assembly Bill 418 without the amendment, and that is the bill that puts the car rental fee into the Highway Fund and will be effective either July or October of this year. ASSEMBLY BILL 418: Revises provisions governing distribution of supplemental city-county relief tax to exclude certain districts. (BDR 32-954) Donna Wadey-Howell, Acting Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS), said that the committee passed the bill that puts the 2 percent from the General Fund into the Highway Fund. Senator O'Donnell stated that bill has to go to the Senate Committee on Finance. He said he is trying to give DMV&PS as much as possible and still spend as little as possible. Mr. Weller said DMV&PS could deal with a 4-point plan instead of a 5-point plan. Ms. King stated that $884,000 will cover the phase in of the staff plus $84,000 for document imagery in the first year. The $3.1 million will be for full staffing, with $84,000 for the document imagery and $680,000 for the computer in the second year. SENATOR SHAFFER MOVED THAT SENATOR O'DONNELL PRESENT THOSE FIGURES TO THE MONEY COMMITTEE. SENATOR NEAL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator O'Donnell adjourned the meeting at 3:30 p.m. RESPECTFULLY SUBMITTED: Diane C. Rea, Committee Secretary APPROVED BY: Senator William R. O'Donnell, Chairman DATE: Senate Committee on Transportation May 9, 1995 Page